In its just-released monthly budget review, the Congressional Budget Office estimated that the federal deficit for fiscal 2018, which ended a week ago on September 30, was $782 billion, a $116 billion increase over the $666 billion deficit recorded in 2017. CBO said that revenues grew by just $13 billion and so were essentially flat compared to what the government collected in 2017. Spending grew by $129 billion, a 3.2 percent increase over 2017.

It would be easy — but very very wrong — to conclude that the increased spending was the reason the budget deficit rose from 2017 to 2018. After all, revenues were about the same both years while spending was higher.

But this overly simple explanation only works if you compare revenues and outlays to what was actually collected and spent the previous year. The explanation is the exact opposite when the substantively correct comparison — to what was expected in 2018 if all tax and spending laws had remained the same — is used.

In June 2017, CBO issued its updated “Budget and Economic Outlook: 2017-2027″ report that showed federal revenues rising in 2018 under current law to $3.5 trillion (Take a look at Table 13). That means the tax bill reduced revenues this past year by about $200 billion compared to what they would have been had it not been enacted.

In that same report, outlays in 2018 were projected to be $16 billion less under current law than the amount CBO now says was actually spent last year.

In other words, the real reason the budget deficit grew from 2017 to 2018 was because revenues were substantially less than what they would have been without the tax bill. Had it not been enacted, the deficit would have dropped below $600 billion instead of rising to close to $800 billion

This is not the spin anti-federal spending activists will use. Indeed, as I’ve posted about previously, even before the tax bill and its projected $1.5 trillion revenue loss was adopted, so-called conservative interest groups such as the Heritage Foundation were pushing the narrative that higher spending was the only reason for the deficit and revenues had nothing to do with it.